The Queen’s speech: What does it mean for co-operatives?

Marking the start of this year’s Parliamentary session, the Queen’s speech on 18 May announced a series of new policies and legislative programmes. Some of the government’s proposed bills...

Marking the start of this year’s Parliamentary session, the Queen’s speech on 18 May announced a series of new policies and legislative programmes. Some of the government’s proposed bills could have a direct impact on co-operatives, particularly the Better Markets Bill, the Digital Economy Bill and the Lifetime Savings Bill.

In the accompanying background briefing paper, the Conservative government pledged to speed up competition investigations and give regulators more powers. It will also introduce measures which make it easier for customers to switch banks and energy providers.

These changes could be an opportunity for co-ops operating in the financial sector, such as credit unions, to attract more members. Co-operative Energy, a business owned by the Midcounties Co-operative is also likely to be affected by the Better Markets Bill, which will encourage consumers to switch providers and get a better deal.

In an attempt to make Britain “a world leader in the digital economy”, the government is introducing the Digital Economy Bill. Through this bill households will have a legal right to a fast broadband connection. Consumers will also be automatically compensated when things go wrong with their broadband service.

George Osborne
George Osborne

Already announced in the Chancellor’s budget speech, plans for a Lifetime Savings Bill will go ahead. The bill includes a new Help To Save scheme for those on low incomes and a new Lifetime Individual Savings Account (ISA) for young people. Abcul, the Association of British Credit Unions, welcomed the Help to Save initiative when it was announced. The scheme will enable account-holders to save up to £50 per month, with the government paying a bonus of 50% of the amount saved after two years. Abcul said it expected a number of its credit unions members to be interested in offering both new products.

How credit unions can grow in a time of rapid change

In addition, the government intends to convert under-performing schools in “unviable” local authorities into academies. The Queen’s speech outlined plans to make every school an academy, but highlighted there was no compulsion to do so. Under the academy model head teachers, not councils, will be responsible for school improvement and a new national funding formula for schools will be set out. It is yet to be seen how these changes will influence the existing co-operative academies.

Also mentioned in the Queen’s speech, the Bus Services Bill will give combined local authorities with elected mayors power to franchise local services in England. Councils will also be able to set standards for ticketing, branding and frequency of services. Some communities across the UK are already exploring co-operative models for running bus services and a number of Labour/Co-op councillors have expressed support for such projects.

Peter Holbrook, chief executive of Social Enterprise UK
Peter Holbrook, chief executive of Social Enterprise UK

Peter Holbrook, chief executive of Social Enterprises UK, said: “Devolving powers over buses to mayors – and to councils on a case by case basis – in England is long overdue, giving them the same sort of power to improve local transport that London has had for some time. For social enterprises in this sector, these new flexibilities will be welcome.”

Mr Holbrook was more critical over a lack of extension to the Public Services Act 2012. “Not extending [the Act] really is a missed opportunity. Our research shows that a number of councils are using the Social Value Act in interesting and creative ways – leading to the delivery of quality public services while saving costs at a time when commissioning and procurement teams are under pressure to serve communities with considerably less money available.

“Unfortunately many councils are still not using the Social Value Act – extending and strengthening this piece of legislation is likely to be the only stimulus that some councils will react to.”

The Queen’s speech was followed by a debate on the government’s programme in both houses. Addressing the House of Commons, Labour leader Jeremy Corbyn said he “welcomed” the government’s “u-turn” on academisation. He added that cuts on local authorities had a devastating impact on public services such as bus services, affecting poorer areas the most and welcomed moves to devolve powers to deregulate bus services.

Claire McCarthy, general secretary of the Co-operative Party
Claire McCarthy, general secretary of the Co-operative Party

Commenting on the announcements made in the Queen’s speech, Co-operative Party general secretary Claire McCarthy said: “Whilst the Co-operative Party welcomed the government’s decision to withdraw plans to force all schools in England to become academies – putting Co-operative Trust Schools at risk – we continue to be concerned about plans to remove the requirement for parent governors on governing bodies. This strikes at local democracy and the right of communities to have a say in the services they rely on.”

The Co-operative Party also welcomed the proposal to ensure companies pay their fair share of tax. “The government could and should have gone further by legislating to ensure that firms go above and beyond current measures, and that their supply chains are included,” she added.

This is a Queen’s speech which is characterised more by what is not in it, rather than what is

Referring to the government’s plans to increase devolution, Ms McCarthy said: “We will study proposals for further devolution to Scotland, Wales and city regions closely. But to be meaningful, such measures must enable devolved governments to deliver on commitments such as that of the Welsh government to run Welsh trains on a not-for-profit, mutual basis.

“But many commentators are saying that this is a Queen’s speech which is characterised more by what is not in it, rather than what is. The Co-operative Party believes the government should be taking forward some of the measures we have proposed which would deliver the legislative and regulatory changes our movement needs to expand and thrive.”

She argued such measures would include introducing co-operative housing tenure; giving communities the right to invest in new energy generation projects in their area; reforming local enterprise partnerships (LEPs) to ensure a voice for co-operatives and local enterprises; promoting financial inclusion and sustainable growth by requiring banks to report on who they are lending to; enabling co-operative schools to legally constitute themselves as co-operatives; and requiring firms with more than 50 employees to share profits with staff.

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